Lumber Liquidators Stock Surges After Analyst Turns Bullish For First Time In Over 2 Years

By Tomi Kilgore Markets MarketWatch Pulse

Shares of Lumber Liquidators Holdings Inc. surged 6.7% in morning trade Wednesday, after Wedbush Securities turned bullish on the wood-flooring seller on the belief that improving fundamentals have created a positive risk-versus-reward scenario for investors. Analyst Seth Basham raised his rating to outperform, after being at neutral since February 2015. He raised his stock price target to $27, which is 18% above current levels, from $22. "New CEO Dennis Knowles and his team have stabilized [Lumber Liquidators], and the company is set to grow again," Basham wrote in a note to clients. "With comps and underlying margins improving, we expect EPS to inflect positively as LL distances itself from negative publicity, improves its assortment, enhances its Pro offering and rolls out installation services." The stock at closed at a two-year high $24.55 on April 28, then plunged 14% on May 2 after the company reported a wider-than-expected first-quarter loss. The stock was up 47% year to date, while the S&P 500 has gained 7%.

Continue Reading Below

Copyright © 2017 MarketWatch, Inc.